Last month we purchased Fidelity Limited Term Bond (FJRLX) in our model portfolio. Part of our strat...
Quadrix Favorites: Nine Top ETFs
09/25/2014 9:00 am EST
Our fund-rating system favors low-cost funds with solid track records, while our Quadrix stock-rating system favors stocks with strong fundamentals and reasonable valuations. By using the systems in concert, we uncovered nine top exchange traded funds (ETFs), says Richard Moroney, editor of Dow Theory Forecasts.
We used Quadrix to evaluate ETF portfolios based on their individual holdings. Quadrix’s predictive power gives us increased confidence when gauging a fund’s total-return potential.
Finding the perfect ETF is an impossible task, as no fund excels in all factors that go into our rating systems. Still, we identified nine truly high-potential funds that possess several key qualities:
- Outstanding scores in our fund-rating system. All nine funds earn scores of at least 93, meaning they rank better than about 93% of their peers.
Percentile ranks, which cover nearly 5,000 mutual funds and ETFs spanning 110 categories, are calculated monthly using total returns, expense ratios, tax-efficiency, and risk-adjusted performance.
- Average scores for Quadrix Overall and Value—the two most effective scores in our stock-rating system—that exceed peer-group averages.
- Returns that outstrip peers. All nine ETFs have outperformed their categories based on one- , three- , and five-year total returns.
- Reasonable expense ratios—a solid predictor of relative performance. The nine funds average expense ratios of only 0.35%, with two funds charging less than 0.15%.
We screened for ETFs with outstanding scores in our fund-rating system and underlying holdings with strong scores in our Quadrix stock-rating system:
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